International Trade

South Asian and Southeast Asian economies have all embraced an outward-oriented development strategy, albeit to different degrees. The result has been an impressive increase in international trade, foreign direct investment (FDI) inflows, and significant productivity improvements, which in turn have contributed to important socio-economic gains. Indeed, some of these economies have delivered among the most striking economic performances in the world.

Japan’s new Minister of Agriculture, Forestry and Fisheries (MAFF) Yoshimasa Hayashi, who previously served in the position in 2012–14, was a logical choice to take over from his disgraced predecessor Koya Nishikawa. He arrived at the Prime Minister’s Office (Kantei) only five minutes after Nishikawa left, and was apparently selected because he was ‘the only one that could immediately do the job’.

The Transatlantic Trade and Investment Partnership, or TTIP, will be the world’s biggest free trade agreement. It is geared toward increasing trade between the EU and the US by opening various markets currently restricted in access or closed by tariffs or regulatory barriers. These include everything from pharmaceuticals, chemicals and energy to food, drink and clothing.

Economic relations between India and the United States seem to be going well. Prime Minister Modi and President Obama reinforced this in New Delhi endorsing the India–US Delhi Declaration of Friendship. But beneath the friendly joint statement of a new economic partnership lie considerable differences on critical issues of economic significance. Strengthening bilateral relations means overcoming these hurdles.

After over a gloomy decade of inconclusive talks, a small but important step was taken in early December 2014 to finish the Doha Round negotiations of the World Trade Organization (WTO). In 2015 and beyond, actions to arrive at a Doha Round Agreement should be accompanied by embracing new plurilateral trade agreements within the WTO. This move can benefit growth and development in Asia. This article reviews the outlook for the WTO Doha Round and examines the case for plurilateral trade agreements for Asia.

Australia’s farmers, particularly beef producers, may have celebrated too early when the Japan–Australia Economic Partnership Agreement (JAEPA) took effect on 15 January 2015. The deal may be gazumped by another that is taking shape between Japan and the United States in the Trans-Pacific Partnership (TPP) negotiations. Some elements of the proposed US–Japan agreement are reminiscent of the kind of bilateralism — or US-specific agricultural market concessions — that characterised Japan’s trade policy in earlier decades.

It is official: India and the US will resume negotiations on a high-standard bilateral investment treaty (BIT). In a recent joint statement Prime Minister Narendra Modi and President Barack Obama affirmed their ‘shared commitment to facilitating increased bilateral investment flows and fostering an open and predictable climate for investment’. Since 2008, the two countries have been engaged in sporadic discussions to conclude the treaty. Negotiations on its wording, based on each country’s revised model treaty texts, will begin soon.

Many bilateral FTAs signed to date in Asia have not brought significant commercial or domestic reform or benefits. For one thing, bilateral ‘free trade agreements’ (which are preferential in character) are less likely to deliver substantial trade opening benefits unless the partners to them are a very large part of global trade, like the United States, Europe and China are for example.

The critics were right. Ten years after the Australia–United States free trade agreement (AUSFTA) came into force, new analysis of the data shows that the agreement diverted trade away from the lowest cost sources. Australia and the United States have reduced their trade with rest of the world by US$53 billion and are worse off than they would have been without the agreement.